Attorney General of Pennsylvania Opines on Electric Generation Suppliers’ Obligations Under the Telemarketer Registration Act
An opinion letter (“Opinion Letter”) from the Commonwealth’s Attorney General’s (“AG’s”) Office addressed to Chairman Cawley of the Pennsylvania Public Utility Commission (the “Commission”) was published in the Pennsylvania Bulletin on March 6, 2010, regarding the regulation of telemarketing activities by Electric Generation Suppliers (“EGSs”) under the Telemarketer Registration Act (the "Telemarketer Act" or the "Act"), 73 P.S. §§ 2241-2249.
The Opinion Letter confirmed that electricity generation supply is regulated as a “consumer service” under the Telemarketer Act because electricity is used for “personal, family or household purposes” on a daily level.
With respect to registering with the AG’s office prior to commencing telemarketing activities, the Opinion Letter further confirmed that an EGS is excluded from the definition of “telemarketer” under the Act because it is licensed by the Commission. Therefore, an EGS need not register with the AG’s office prior to commencing telemarketing activities. The exclusion does not apply, however, to the agents of EGSs, such as individuals and businesses initiating or receiving calls pursuant to contracts with EGSs. As a result, telemarketer agents of EGSs must first register with the AG’s office prior to commencing telemarketing activities on behalf of an EGS.
Although an EGS is excluded from the definition of “telemarketer” for registration purposes, it is nonetheless subject to all other requirements of the Telemarketer Act, as are its agents.
Apparently, the Commission requested clarification on this issue because it is common practice for an EGS to receive from the electric distribution company (“EDC”) a list of names of customers who may wish to shop for electricity supply. These “shopping lists” serve to facilitate electric competition by informing EGSs which customers wish to be contacted about their supply options. Customers usually indicate consent to the release of their information to EGSs in these lists through an ‘’opt-in’’ process, in which the customer affirmatively agrees to the release of information, or through an ‘’opt-out’’ process, in which the customer does not object to the release of information.
However, the AG’s opinion makes clear that even though a customer may have consented to have its name appear on such list, its consent does not constitute the type of consent needed to trump the “do-not-call” list. As a result, an EGS (or its agent) must first check the “do-not-call” list prior to soliciting customers via telemarketing. If a customer appears on the “do-not-call” list, the EGS (or its agent) must not solicit this customer by phone.
Consistent with this reasoning, the fact that an EDC provides customer information to the EGS does not shield the EGS from liability for unsolicited telephone calls to a consumer. Section 5(a) of the Telemarketer Act, 73 P.S. § 2245(a) shields from liability telephone solicitation calls to consumers who appear on the “do-not-call” list, provided that four statutory procedures are established. In particular, a telemarketer will not be liable if: (i) the telemarketer has established and implemented written procedures to comply with the “do-not-call” requirements; (ii) the telemarketer has trained its personnel in the procedures; (iii) the telemarketer has maintained and recorded lists of persons who may not be contacted; and (iv) any subsequent call is the result of “error.” As for the “error” provision, the Opinion Letter explained that it is immaterial that an EGS or its agent uses customer information supplied by an EDC in making telephone solicitation calls. Rather, the burden is on the EGS (or its agent) to maintain and check the “do-not-call” list on its own to ensure that the customer’s name does not appear on the list.
Finally, Section 2245(c) of the Telemarketer Act contains certain mandatory provisions for consumer contracts. These provisions apply unless the contractual sale is regulated under other laws of this Commonwealth. The Opinion Letter did not opine as to whether the contract between the EGS and the customer (i.e., the disclosure statement), which is regulated by the Commission under the Public Utility Code and the Commission’s regulations, must comply with these mandatory provisions of the Telemarketer Act.